ACCC cracks down on environmentally friendly packaging

by Sharon Segal

Although the ACCC guide does not change the law, it gives some further indication as to what the ACCC would consider to be a breach of the Trade Practices Act when making environmental claims generally.

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The Australian Competition and Consumer Commission has released a new guide to assist businesses which make environmental claims on packaging.

The ACCC's guide, "Biodegradable, degradable and recyclable claims on plastic bags" is designed to educate businesses about their legal obligations in relation to the use of claims such as biodegradable, degradable or recyclable on packaging. Although the title refers to plastic bags, it is relevant for all biodegradable, degradable and recyclable claims and (to some extent) the use of environmental claims in marketing generally.

Although the ACCC guide does not change the law, it gives some further indication as to what the ACCC would consider to be a breach of the Trade Practices Act when making biodegradable, degradable and recyclable claims on packaging and environmental claims generally.

The Trade Practices Act prohibits conduct, in trade or commerce, which is misleading and deceptive or is likely to mislead or deceive. This includes the making of false or misleading representations on packaging (including plastic bags).

The ACCC guide highlights the following things to remember when making these types of claims:

Overall impression: it is important to consider the overall impression that is created by the claim, not just whether the claim is technically or narrowly correct. Misleading conduct can include what is not said if consumers would reasonably expect that something would be disclosed. Be careful using images that represent that a product has either environmental benefits (eg. images of the earth or a forest) or the endorsement of a environmental organisation or system (eg. official-looking logos).

Be careful using broad words/claims on packaging:

"environmentally friendly", "environmentally safe", "planet safe" or "green": these are vague words that could mislead consumers into thinking that a product has no adverse impact on the environment at any stage of its life-cycle (which is unlikely);

"degradable": this claim may be misleading without qualifying how the degradation process occurs (given that most substances will degrade given sufficient time and exposure to the right conditions);

"biodegradable": an unclear term which could be interpreted as having various meanings;

"recyclable": if you make this claim (including by using a relevant symbol), make sure that appropriate facilities are available in which to recycle the product;

recycling claims: if only some of the material included in your product has been recovered and reused, the relevant proportions should be specified;

"100% biodegradable" and "100% degradable": the use of these absolute claims may be misleading because they indicate that the whole of a product will biodegrade or degrade in the same way and over the same time period (which is unlikely).

Make sure you can back it up - businesses must be able to substantiate any claim made on their products or packaging.

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Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this communication. Persons listed may not be admitted in all States and Territories.